zaOza - Vivendi Mobile Entertainment

Thomas Husson | February 20, 2008, 04:12 AM

As my colleague Mark Mulligan pointed out yesterday, Vivendi officially launched its new content portal zaoza.

In fact, the service was announced back in November (see here) and launched in beta under the name "magic zaoza". The idea was to create buzz among VIPs who could access the content for free and share it with up to 5 friends (DRM protected). This was a clever viral marketing approach targeted towards youth. Last year,in its "European Mo bile Youth Consumer Survey: Targeting digital natives and keeping them loyal", JupiterResearch clearly pointed out that a virtuous cycle between messaging and content should be implemented to augment the current niche of mobile entertainment aficionados (at 10 percent of the mobile population and 24 percent of ages 15 to 24) because these aficionados are also heavy communicators. To leverage the nature of a personal communications platform, stakeholders must mix content and messaging (e.g., launching community offerings with viral features and superdistribution business models). No doubt we will see more and more of those offerings, even if here there is no superdistribution BM (no use of OMA 2.0) but only a marketing tactic.

However, I was surprised by the fact that Vivendi heavily advertised the beta service with prime-time TV spots. They thus already managed to attract 110,000+ subscribers (who on average have downloaded circa 8 pieces of free content) and target 500,000 subscribers by the end of 2008. The key challenge here will be to establish the brand and to maintain loyalty via an effective CRM strategy.

Many in the press are referring to the Vizzavi story. There are however key differences in the sense that the group has learned from past mistakes, that the investment is much more limited (~10M euros for now), that the market is more mature and that other labels (EMI, Sony BMG and indie Because; Warner currently in discussion) have joined this 100% Vivendi project. This PC-mobile platform available via mobile phones through Gallery (a multi-operator kiosk) and soon via i-mode, via a direct url WAP address and via Internet is not only about music. For 3 euros / month, consumers can download ringtones, games (not only Vivendi Games content but also Eidos, THQ, I-play) and video. The interesting point is that consumers can keep the content downloaded even once the subscription ends. However, with such a low price point, there is obviously access to only a small catalogue of content referred to be "quasi-exclusive". It means there will be thousands of content pieces available with roughly 100 pieces renewed every day. However, there is a link to a Zaoza store where you can access the whole catalogue on a paid basis (no ad-funded BM).

Vivendi is trying to have a realistic approach: launching first in France where subscription-model for premium content have not really taken place (except via the i-mode business model) and where Universal Music has a very strong market share, and then replicate the model first in Germany (s2 2008) and then in the UK (early 2009) if successful.

The company will continue to have deals with operators, handset manufacturers (Nokia comes with music), innovative players (Omnifone) as well at its own license agreement with Bouygues Telecom (1M customers as of November 2007 !).

The key takeaway here is that Vivendi is going directly to consumers bypassing the traditional aggregators by establishing a trusted content brand. Gameloft just followed the same route recently. This highlight tectonic changes in the mobile content value chain. Jupiter will soon publish a report on this topic. Watch this space if you want to know more about it.